1. A breach of contract is a refusal or failure to comply with the terms of the
ID: 2533370 • Letter: 1
Question
1. A breach of contract is a refusal or failure to comply with the terms of the contract. If the seller breaches the purchase contract, the buyer may do all of the following EXCEPT
A. Sue the seller for specific performance
B. Rescind the contract and recover the earnest money
C. Sue the seller for damages
D. Sue the broker for nonperformance
2. Broker B arrives to present a purchase offer to R, an invalid, and finds her son and his wife also present. In the presence of Broker B, both individuals persistently urge R to accept the offer, even though it is much lower than the price she has been asking for her home. If R accepts the offer, she may later claim that:
A. Broker B should not have brought her such a low offer for her property
B. She was under duress from her son and his wife to see the purchase offer he brought to her
C. Broker B defrauded her by allowing her son and wife to see the purchase offer he brought to her
D. Her consumer protection rights have been usurped by her son and daughter-in-law
3. Which of the following best describes earnest money?
A. The consideration for the sale of the property
B. The money put up by the buyer at the time the offer is made
C. The commission to be paid to the broker
D. The money to be used for paying for some of the closing costs
4. A counteroffer voids
A. The earnest money deposit C. An offer
B. The title insurance D. The statute of frauds
5. The essential elements of a contract include all of the following EXCEPT
A. Offer and Acceptance C. Consideration
B. Competent Parties D. Notarized Power of Attorney
6. An agent of an agent is best described as:
A. Subagent
B. Undisclosed dual agency
C. Special agent
D. Subagent
7. When an authorization and consent is given between an agent and their client, a special relationship of trust and confidence is established. This is known as:
A. Fiduciary relationship
B. Subagent relationship
C. Common law agency relationship
D. Designated agency relationship
8. The law that define the rights and duties of the principal and the agent is:
A. State law C. Law of limited agency
B. Law of agency D. Law of fiduciary duties
9. A third party or a non-represented consumer for whom some level of service is provided and who is entitled to fairness and honest is known as:
A. Client
B. Principal
C. Customer
D. Agent
10. The fiduciary relationship between the principal and the agent is:
A. Fiduciary
B. Client
C. Principal
D. Agency
11. An individual who hires the agent and delegates to him or her the responsibility of representing the principal’s interest is:
A. The principal
B. The client
C. The Customer
D. The agent
12. Agent Heber is representing buyers Claire and Jake and sellers Trevor and Katie in the same transaction. Agent Heber is acting as a:
A. Single agent C. Special Agent
B. General Agent D. Dual agent
13. A process that accommodates and in-house-sale where two different agents are involved and one represents the buyer and the other agent represents the seller, it is a:
A. Designated agency
B. Limited agency
C. Special agency
D. Universal agency
14. Which of the following duties are required in a fiduciary relationship
A. Obedience, confidential, disclosure, liability, concern,
B. Loyalty, concern, limited agency, express agency, accountability
C. Care, Loyalty, Confidentially, concern, disclosure of limited agency
C. Disclose, accountability, loyalty, confidentially, accountability, reasonable care
15. Exaggeration of a property’s benefits is called:
A. Puffing
B. Non-disclosure
C. Violation of Neglect
D. Breach of fiduciary duty to the client
16. An agent must place the principal’s interest above those of all others, including the agent’s own interest. This is the definition of:
A. Obedience C. Care
B. Loyalty D. Agency coupled with an interest
17. Broker Bob listed the Hanson’s home. Buyer John came into the open house that Broker Bob was hosting. Buyer John did not have an agent and ask Broker Bob to represent him and write up an offer on the house and Broker Bob agreed. Has broker Bob violated any agency laws?
A. No, because Broker Bob is looking out for the best interest of his sellers by bringing an offer to the table
B. No, because Broker Bob’s intention was to find a buyer at the open house
C. Yes, because in order for Broker Bob to represent the buyer he need to get permission from the seller first
D. Yes, because Broker Bob needed to disclose all of the defects in the house prior to writing the offer
18. Nathan is a non-represented party for who m some level of service is provided and who in entitled to fairness and honesty. Nathan is best described as which of the following?
A. Client C. Nonagent
B. Customer D. Special Client
19. Properties that society has found undesirable because of events that occurred there are known as:
A. A Material fact C. Latent defect
B. Stigmatized Properties D. Buyers due diligence
20. A contract in which all of the parties have fulfilled their promises and the contract has been performed is known as:
A. Executory C. Executed
B. Execute D. Full Performance
21. Buyer Adam had his real estate agent write up an offer on a house for him and his wife. Their real estate agent was also the listing agent on the house that Buyer Adam and his wife wanted to purchase. The real estate agent just did a verbal offer to the sellers. After two weeks, buyer Adam and his wife decided that they did not want to purchase the house. What kind of contract would this most likely be?
A. Unilateral C. Bilateral
B. Enforceable D. Unenforceable
22. A contract that is demonstrated by the party’s actions or conduct would be an example of which type of contract?
A. Unilateral C. Bilateral
B. Implied D. Expressed
23. A contract that has all of the legal elements and is fully is enforceable is:
A. Valid C. Voidable
B. Void D. Unenforceable
24. A contract that lacks one or all elements and has no legal force or effect is?
A. Valid C. Voidable
B. Void D. Enforceable
25. A contract that has all the legal elements and may be rescinded or disaffirmed is?
A. Valid C. Voidable
B. Void D. Enforceable
26. A contract that has all the legal elements and is enforceable only between the parties is?
A. Violation of Statute of Frauds C. Void
B. Void D. Unenforceable
27. A contract that substituted for a new contract is:
A. Novation C. Assignment
B. Sub-Contracting D. Statute of limitations
28. Amy has transferred all of her rights and duties in her rental contract to Joe. Amy has:
A. Become the landlord to Joe C. Assigned her contract to Joe
B. Novated her contract to Joe D. Exceeded the statute of limitation
29. Additional conditions that must be satisfied before a sales contract is fully enforceable are called:
A. Disclosures C. Contingencies
B. Options D. Sales Contract
30. A contract for purchase in which the sellers keeps the title in his name until the property has been fully paid off and executed is which type of contract:
A. Contract for deed C. Option Contract
B. Contract that has been executed D. Contingency contract
31. Under the statute of Frauds, all contracts for the sale of real estate must
A. Have an earnest money check accompany it
B. Be backed by a real estate brokerage
C. Be in writing to be enforceable
D. Have the appraisal performed first on the property before coming to an agreement on price
32. Mary and John are making an offer on a house that real estate agent Andrew showed them. The sales contract will only go thru based upon the approval of Mary’s father who is providing the down payment for them. This condition in the contract is called a (an):
A. Addendum
B. Warranty
C. Guarantee
D. Contingency
33. The period of time after John and Mary has accepted an offer from buyer Alice and Fred on their house but before title actually passes, the status of the contract is
A. Implied
B. Voidable
C. Executory
D. Executed
34. A buyer and seller are under contract. The seller breaches the sales contract. The buyer is suing for the transfer of property. This best describes which of the following?
A. Liquidated damages
B. Actual damages
C. Addendum for performance
D. Specific performance
35. A legally enforceable agreement is written up between the buyer and seller. The two parties promise to cooperate and do everything they can to perform on their promise. The buyer promises to do everything to acquire the loan and the seller promises to do everything to make the house qualify to sell. This is known as
A. A bilateral contract
B. A unilateral contract
C. Escrow Agreement
D. An option contract
36. An option to purchase contract binds which of the following?
A. Seller only
B. Buyer only
C. Neither the buyer nor the seller
D. Both the buyer and the seller
37. The seller is selling his property to a buyer with seller financing. The seller will keep the title in his name until the property is paid in full. The seller in this type of sale is called the:
A. Vendee
B. Escrow facilitator
C. Purchase Money Mortgage
D. Vendor
38. The seller is selling his property to a buyer with seller financing. The seller will keep the title in his name until the property is paid in full. What kind of contract is this called?
A. Contact for deed
B. Land contract
C. Installment contract
D. All of the above
39. A real estate agent/broker is responsible for keeping the client informed of all the facts that could affect the sales transaction. This is a duty of:
A. Care C. Disclosure
B. Loyalty D. Obedience
40. Does a counter proposition enjoy the same rights of withdrawal (before acceptance) as the original offer to purchase?
A. Yes, it is a new offer C. Only after 3 days
B. No, it was rejected by the seller D. Only after 5 days
41. Mary just listed her neighbor’s property. What kind of contract does her brokerage have with them?
A. Listing agreement C. Contract for deed
B. Buying agreement D. Installment contract
42. Who are the principal parties in an agreement for deed sale?
A. Seller and Buyer C. Both A and B
B. Vendor and Vendee D. Neither A and B
43. If a date is omitted in a contract, is it invalid?
A. Statutes of Fraud require a date to be a valid contract
B. No, a date is not one of the essential elements for a valid contract
C. Yes because a date is one of the essential elements that makes a contract valid
D. Yes, if it is omitted it gives way for the other party to void the contract
44. Does the term ‘valuable consideration” mean only a money consideration?
A. Yes, at least 5% of the purchase price must be put down as earnest money
B. Yes, but the amount is always negotiable between the seller and the buyer
C. No, anything of value can be put down as earnest money as long as both parties agree to it.
D. Yes because the more money that is put down by the buyer, the more likely the seller will accept his offer.
45. When a buyer or seller default on the contract, what steps could each take?
A. Liquidated damages C. Could agree to cancel without damages
B. Specific performance D. All of the above
Explanation / Answer
Answer 1:
D. Sue the broker for nonperformance
Reason: Buyer can take all the required actions against the seller or may rescind the contract . But as broker is the third party, buyer can not sue him for non performance.
Answer 2:
B. She was under duress from her son and his wife to see the purchase offer he brought to her
Reason: As she accepted the offer only because her son and his wife pressurize her to do so. So, later on she can claim that she was under duress from her son and wife, which will make contract voidable.
Answer 3:
B. The money put up by the buyer at the time the offer is made
Reason: When a potential buyer of property such as residential real estate generally signs a contract and pays a sum acceptable to the seller by way of earnest money.
Answer 4:
c. An offer
Reason: A counteroffer is a reply to an original offer, which is greater or less than the original price. Counteroffer voids a previous offer and the entity, which presented that offer, is no longer legally responsible for it.
Note: As per answering guidelines, I am submitting answers for first 4 parts. For rest of the answers post questions separately.
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